CESR would support a single consolidation principle and understands that the draft proposes a control-based model that implicitly incorporates some elements of the risks and rewards approach. However, CESR would prefer this incorporation to be explicit.
CESR, like EFRAG, would support a single consolidation principle and understands that ED 10 is proposing a control-based model that implicitly incorporates some elements of the risks and rewards approach. However, CESR would prefer this incorporation to be explicit.
Furthermore, CESR is not aware of any major deficiencies arising from the current application of IAS 27 and SIC-12, and therefore is concerned that the application of ED 10 as drafted might lead to less entities being consolidated.
CESR supports EFRAG that in the short term the IASB should address the need for improved disclosures, whilst allowing more time for the design of a single consolidation principle and a comprehensive analysis of its potential consequences.
According to the IASB’s work program, the consolidation project was to be a joint project with the FASB. CESR is not aware that an exposure draft covering the general principle of consolidation is currently open for comment in the US. EFRAG’s suggested solution would allow the two standard setters time to develop a truly joint approach.
© CESR - Committee of European Securities Regulators
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